A37-322-2000-L 


STATE 

BANKING  LAWS 
OF  TEXAS 


AMENDMENTS  OF  1920  AND  1921 

rVEWT*  8?  SLUT"} 

J U L % (y  ^ . 

ED.  HALL 

Commissioner  of  Insurance  and  Banking 


AUSTIN,  TEXAS 

Von  Boeckmann-Jones  Co..  Printers 
1922 


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BANKS  AND  BANKING— APPLICANTS  FOR  CHARTERS  OF 
STATE  BANKS  TO  PAY  EXPENSES  OF  CERTAIN 
INVESTIGATION. 

(Passed  by  the  Third  Called  Session  of  the  Thirty-sixth  Legislature.) 

H.  B.  No.  159]  Chapter  48. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas: 

Section  1.  When  application  is  made  for  the  organization  of  a 
State  bank,  the  applicants  shall  be  required  to  pay  to  the  Commis- 
sioner of  Insurance  and  Banking  of  the  State  all  actual  necessary 
expenses  incurred  by  the  Department  of  Insurance  and  Banking  in 
making  an  investigation  of  such  application  not  to  exceed  fifty  dollars. 

Sec.  2.  The  fact  that  there  is  no  law  upon  the  statute  books  author- 
izing the  collection  of  fees  covering  expenses  of  such  investigations 
and  that  numerous  applications  for  charters  are  being  filed,  creates  an 
emergency  and  an  imperative  public  necessity  that  the  Constitutional 
rule  requiring  that  bills  be  read  on  three  several  days  be  suspended, 
and  the  same  is  hereby  suspended,  and  that  this  Act  take  effect  from 
and  after  its  passage,  and  it  is  so  enacted. 

Effective  ninety  days  after  adjournment,  September  16,  1920. 


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BANKS  AND  BANKING— REGULATING  AMOUNT  OF  DE- 
POSITS TO  BE  KEPT  ON  HAND. 

(Passed  by  the  Third  Called  Session  of  the  Thirty-sixth  Legislature.) 

H.  B.  No.  147]  Chapter  41. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas: 

Section  1.  That  Section  3 of  the  Act  entitled  “An  Act  further 
regulating  banks  and  bank  and  trust  companies  incorporated  under 
the  laws  of  Texas  by  granting  authority  to  such  corporations  to  become 
members  of  Federal  Reserve  Banks,”  etc.,  passed  at  the  Second  Called 
Session  of  the  Thirty-third  Legislature  and  approved  October  19,  1914, 
be  so  amended  as  hereafter  to  read  as  follows : 

Section  3.  Every  banking  corporation  chartered  under  the  laws  of 
this  State  with  a capital  stock  of  less  than  twenty-five  thousand  dollars 
and  which  does  not  become  a member  of  a Federal  Reserve  Bank 
under  the  laws  of  the  United  States,  shall  at  all  times  have  an  amount 
of  cash  on  hand  and  cash  due  from  other  banks  equal  to  at  least  twenty 
per  cent  of  the  aggregate  amount  of  its  demand  deposits;  and  every 
bank,  not  located  in  a central  reserve  city,  having  a capital  stock  of 
twenty-five  thousand  dollars  or  more,  and  which  do  not  become  mem- 
bers of  a Federal  Reserve  Bank  under  the  laws  of  the  United  States, 
shall  at  all  times  have  an  amount  of  cash  on  hand  and  cash  due  from 
other  banks,  equal  to  at  least  fifteen  per  cent  of  the  aggregate  amount 
of  its  demand  deposits.  Whenever  the  reserve  of  any  bank  as  here- 
inbefore required  shall  fall  below  the  amount  specified  above  for  its 


4 - 


class,  then  such  bank  shall  not  make  any  new  loans  or  discounts  until 
it  shall  by  collection  restore  its  lawful  reserve.  Such  reserve  fund,  or 
any  part  thereof,  together  with  the  current  receipts  may  be  kept  on 
hand  or  on  deposit  payable  on  demand  in  any  bank  or  banking  asso- 
ciation of  the  State  of  Texas,  or  any  bank,  banking  association  or 
trust  company  regularly  chartered  and  operating  under  the  laws  of 
any  State  or  under  the  laws  of  the  United  States,  approved  by  the 
Commissioner  of  Insurance  and  Banking,  and  having  a paid  up  capital 
stock  of  fifty  thousand  dollars  or  more,  but  the  deposit  in  any  one 
bank  or  trust  company  shall  not  exceed  twenty  per  cent  of  the  total 
deposits,  capital  and  surplus  of  the  bank  making  the  deposit. 

Sec.  2.  The  fact  that  large  sums  of  money  are  being  held  in  the 
vaults  of  the  State  banks  of  Texas,  depriving  the  public  of  the  use  of 
same,  creates  an  emergency  and  an  imperative  public  necessity  that 
the  Constitutional  rule  requiring  that  bills  be  read  on  three  several 
days  be  suspended,  and  the  same  is  hereby  suspended,  and  that  this 
Act  take  effect  from  and  after  its  passage,  and  it  is  so  enacted. 

Effective  June  17,  1920. 


STATE  BANK  EXAMINERS— AMENDING  ACT  PROVIDING 
FOR  THE  APPOINTMENT,  DISCHARGE 
AND  REMOVAL  OF. 

(Passed  by  the  Regular  Session  of  the  Thirty-seventh  Legislature.) 
H.  B.  No.  245.]  Chapter  65. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas: 

Section  1.  That  Article  521,  Chapter  6,  Title  14,  Revised  Civil 
Statutes  of  the  State  of  Texas,  1911,  and  Section  5,  Chapter  205, 
General  Laws  of  Texas,  passed  by  the  Thirty-fifth  Legislature  at  the 
Regular  Session  thereof,  approved  by  the  Governor  of  Texas,  April 
9,  1917,  be  amended,  and  that  this  amendatory  Act  shall  be  Article 
521  of  the  Civil  Statutes  of  the  State  of  Texas,  so  as  to  hereafter  read 
as  follows: 

Article  521.  The  Commissioner  of  Insurance  and  Banking,  from 
time  to  time,  shall  appoint  such  number  of  State  Bank  examiners  as 
may  be  necessary  to  make  the  examination  of  banking  corporations 
required  and  allowed  by  law,  which  number  shall  at  no  time  exceed 
the  ratio  of  one  examiner  for  each  forty  banking  corporations  then 
subject  to  examination  under  the  laws  of  this  State;  and  the  Com- 
missioner of  Insurance  and  Banking  may  also  designate  any  one  of 
said  State  bank  examiners  as  a general  liquidating  agent,  with  his 
office  in  the  banking  department,  for  the  purpose  of  liquidating  any 
one  or  all  State  banks  in  the  process  of  liquidation  and  for  the  purpose 
of  conducting  such  liquidation  under  the  direction  of  the  said  Com- 
missioner. The  salary  of  each  of  said  State  bank  examiners  and  of 
the  general  liquidating  agent  shall  be  for  their  first  year  of  employment 
in  the  Department  at  the  rate  of  Two  Thousand  Four  Hundred 
($2,400.00)  Dollars  per  year,  and  such  salary  shall  be  increased  by  the 
sum  of  Two  Hundred  ($200.00)  Dollars  per  year  for  each  year  of  con- 


tinuous  service  in  the  Department  until  the  maximum  salary  of  Three 
Thousand  Six  Hundred  ($3,600.00)  Dollars  shall  be  reached,  and  in 
addition  to  the  salaries  above  specified,  they  shall  receive  all  necessary 
traveling  expenses,  and  it  is  provided  that  bank  examiners  and  liquidat- 
ing agent  now  in  the  employ  of  such  Department  shall  have  the  period 
of  past  continuous  employment  counted  in  determining  their  rate 
of  pay;  said  State  bank  examiners  and  the  general  liquidating  agent 
may  be  discharged  and  removed  by  the  Commissioner  of  Insurance 
and  Banking.  The  entire  salary  of  the  general  liquidating  agent  may 
be  assessed  by  the  Commissioner  of  Insurance  and  Banking  against 
any  bank  or  banks  in  liquidation,  in  amounts  proportionate  to  the 
salary  and  time  required  by  the  general  liquidating  agent  in  such 
liquidation,  and  may  be  collected  and  paid  into  the  State  Treasury 
as  fees. 

Sec.  2.  The  salaries  provided  in  this  Act  shall  not  become  effective 
until  September  1,  1921. 

Sec.  3.  The  importance  of  the  above  legislation  and  the  necessity 
existing  therefor  in  the  interest  of  the  State  banks  of  this  State,  creates 
an  emergency  and  an  imperative  public  necessity  demanding  that  the 
rule  requiring  bills  to  be  read  upon  three  several  days  be  suspended, 
and  such  rule  is  so  suspended  and  this  Act  take  effect  from  and  after 
its  passage,  and  it  is  so  enacted. 

Effective  September  1,  1921. 


BANKS— DEPOSITORY  FOR  PUBLIC  FUNDS;  AUTHORIZING 
THE  SELECTION  OF  SPECIAL  DEPOSITORY  WHEN 
BANK  SUSPENDS  BUSINESS. 

(Passed  by  the  Regular  Session  of  the  Thirty-seventh  Legislature.) 
S.  B.  No.  296.]  Chapter  27. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas: 

Section  1.  When  any  bank,  which  is  a county,  city  or  district 
depository,  of  public  funds  under  the  laws  of  this  State,  suspends 
business  or  is  taken  charge  of  by  the  Comptroller  of  the  Currency  or 
the  Commissioner  of  Insurance  and  Banking,  as  the  case  may  be,  the 
lawful  county,  city  or  district  authorities,  authorized  to  select  the 
depository  in  the  first  instance,  shall  have  the  discretion  and  authority 
to  select  by  contract  a special  depository  for  the  public  funds  in  such 
suspended  bank.  Such  special  depository  shall  assume  the  payment 
of  the  amount  of  public  funds  due  by  the  suspended  bank  on  the  date 
of  its  suspension,  including  interest  to  that  date,  and  shall  pay  the 
same  to  the  lawfully  designated  public  authority  in  accordance  with 
the  contract  entered  into  by  such  special  depository.  The  contract 
shall  be  for  the  performance  of  the  agreement  entered  into  between 
the  proper  public  authorities  designated  above  and  the  special  depos- 
itory, and  shall  require  the  payment  of  the  deposit  in  such  installments 
as  may  be  agreed  upon,  the  last  of  which  shall  be  paid  not  exceeding 
three  years  from  the  date  of  the  contract;  the  installments,  or  the 
amount  due,  may  be  evidenced  in  the  discretion  of  the  contracting 


— 6 — 


parties  by  negotiable  certificates  of  deposit  or  cashier’s  checks,  payable 
at  specified  dates,  if  made  a part  of  the  contract;  the  performance  of 
the  contract  and  the  payment  of  funds  described  therein  shall  be 
secured  by  bond,  or  by  several  bonds  in  case  of  installments,  to  be 
given  by  the  special  depository  with  the  same  character  of  sureties 
as  is  required  by  regular  depository  bonds.  The  contracts  and  bonds 
of  special  depositories  shall  be  approved  by  the  authority  authorized 
by  law  to  approve  contracts  and  bonds  of  regularly  selected  depositories. 
The  rate  of  interest  which  funds  placed  in  a special  depository  hereunder 
shall  bear  shall  be  fixed  by  the  contract,  or  such  funds  may,  in  the 
discretion  of  the  contracting  parties,  be  non-interest  bearing. 

Sec.  2.  If  any  State  Funds  are  in  the  county  depository  which  has 
failed,  the  amount  thereof  shall  be  ascertained  by  the  State  Comp- 
troller, who  shall  be  authorized  in  his  discretion  to  enter  into  a contract 
for  the  custody  and  payment  of  the  same,  with  the  special  depository 
selected  by  the  county  authorities  in  the  same  manner  that  the  county 
authorities  are  herein  authorized  so  to  do,  and  to  take  and  approve 
contracts  and  bonds  therefor;  providing,  however,  that  State  funds 
thus  placed  in  such  special  depository  shall  bear  the  average  rate  of 
interest  received  by  the  State  on  State  funds  placed  with  the  regularly 
selected  state  depositories. 

Sec.  3.  Nothing  in  this  Act  shall  require  the  State,  County,  city 
or  district  authorities  to  select  any  special  depository  as  is  herein 
permitted,  but  they  may  proceed  by  their  lawful  remedies  against 
the  failed  bank,  if,  in  their  discretion,  it  is  best  for  the  public  interest 
so  to  do. 

Sec.  4.  The  importance  of  this  legislation  and  the  crowded  condi- 
tion of  the  calendar  creates  an  emergency,  and  an  imperative  public 
necessity  which  requires  that  the  constitutional  rule  requiring  bills 
to  be  read  on  three  several  days  be  suspended,  and  said  rule  is  hereby 
suspended,  and  that  this  Act  take  effect  and  be  in  force  from  and  after 
its  passage,  and  it  is  so  enacted. 

Approved  March  12,  1921. 

Effective  March  12,  1921. 

STATE  BANKING  CORPORATIONS— REGULATING  THE  IN- 
CREASE OF  CAPITAL  STOCK  OF. 

(Passed  by  the  Regular  Session  of  the  Thirty-Seventh  Legislature.) 

H.  B.  No.  291.]  Chapter  54. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas: 

Section  1.  That  Article  564,  Chapter  6,  Title  14,  Revised  Civil 
Statutes  of  the  State  of  Texas,  1911,  be  amended  so  as  to  hereafter 
read  as  follows: 

Article  564.  If,  from  the  sworn  statement  of  the  average  daily 
deposits  of  any  state  bank  or  banking  corporation,  organized  under  or 
subject  to  the  general  banking  laws  of  this  State,  for  the  year  ending 
on  the  first  day  of  November,  1920,  or  of  any  subsequent  year,  filed 
with  the  Commissioner  of  Insurance  and  Banking,  as  provided  in  this 


— 7 — 


Title,  it  shall  appear  that  such  average  daily  deposits  for  such  year 
amounting  to  more  than  five  times  the  capital  stock  and  surplus  of 
such  bank  on  November  1st,  of  such  year,  if  the  capital  stock  of  such 
bank  is  not  more  than  ten  thousand  dollars,  ($10,000.00),  or  more  than 
six  times  such  capital  stock  and  surplus,  if  the  capital  stock  is  more 
than  ten  thousand  dollars,  ($10,000.00),  and  less  than  twenty  thousand 
dollars,  ($20,000.00),  or  seven  times  the  capital  stock  and  surplus,  if 
the  capital  stock  is  twenty  thousand  dollars,  ($20,000.00),  or  more 
and  less  than  forty  thousand  dollars  ($40,000.00),  or  eight  times  such 
capital  stock  and  surplus,  if  the  capital  stock  is  forty  thousand  dollars, 
($40,000.00),  or  more  and  less  than  seventy-five  thousand  dollars, 
($75,000.00),  or  nine  times  such  capital  stock  and  surplus,  if  the  Capital 
stock  is  seventy-five  thousand  dollars,  ($75,000.00),  or  more  and  less 
than  one  hundred  thousand  dollars,  ($100,000.00),  or  ten  times  such 
capital  stock  and  surplus,  if  the  capital  stock  is  one  hundred  thousand 
dollars,  ($100,000.00),  or  more;  then,  in  any  such  case,  it  shall  be  the 
duty  of  the  State  Banking  Board  to  require  that  such  state  bank  shall, 
within  sixty  days  thereafter,  increase  its  capital  by  twenty-five  per 
cent,  thereof;  provided,  that  the  State  Banking  Board  may  relieve, 
or  refuse  to  relieve,  any  such  bank  from  such  order  on  showing  to  said 
board  of  conditions  applying  to  and  relating  to  the  increase  of  the 
average  daily  deposits  in  such  bank,  which  said  board  may  find  to 
justify  such  relief  or  not  to  justify  such  relief;  and  it  shall  be  the  duty 
of  the  Commissioner  of  Insurance  and  Banking  to  immediately  furnish 
such  state  bank  or  banking  corporation  with  a certified  copy  of  the 
order  making  such  requirement,  as  well  as  any  order  granting  or  re- 
fusing to  grant  relief  from  such  requirement;  and  upon  receipt  of  the 
order  making  such  requirement,  the  directors  of  such  state  bank  or 
banking  corporation  shall,  within  the  time  required,  cause  such  in- 
crease to  be  made  in  the  capital  stock;  and  if  the  same  is  not  done 
within  such  time,  it  shall  be  unlawful  for  such  bank  to  thereafter  re- 
ceive any  deposits  at  any  time  when  its  total  demand  and  time  deposits 
and  saving  accounts  shall  in  the  aggregate  amount  to  more  than  the 
limitation  placed  upon  deposits. 

Sec.  2.  It  shall  hereafter  be  unlawful  for  any  director,  officer  or 
employee  of  any  State  bank  or  banking  corporation,  organized  under 
or  subject  to  the  general  banking  laws  of  this  State,  or  any  person 
for  any  such  bank  or  banking  corporation,  to  receive  any  deposits  at 
any  time  after  such  bank  or  banking  corporation  has  failed  or  refused, 
within  the  time  required,  to  comply  with  any  order  or  requirement  of 
the  State  Banking  Board,  pursuant  the  provisions  of  Section  1 of  this 
Act,  when  its  total  demand  and  time  deposits  and  savings  accounts 
shall  in  the  aggregate  amount  to  more  than  the  limitations  placed 
upon  deposits  by  Section  1 of  this  Act;  and  such  acceptance  of  deposits 
by  any  director,  officer,  or  employee  of  any  such  bank  or  banking 
corporation  or  by  any  persons  therefor,  shall  be  deemed  a misdemeanor 
and  punishable  upon  conviction  by  a fine  of  not  less  than  one  hundred 
dollars  ($100.00),  nor  more  than  five  hundred  dollars  ($500.00),  or  by 
imprisonment  in  the  county  jail  for  not  less  than  thirty  days,  nor 
more  than  ninety  days,  or  by  both  such  fine  and  imprisonment;  and 
each  acceptance  or  receipt  of  a deposit  in  violation  hereof  shall  consti- 
tute a separate  offense. 

Sec.  3.  The  fact  that  there  are  a number  of  banks  in  Texas  now 


— 8 — 


whose  bank  deposits  were  in  1919  abnormally  increased,  and  the  further 
fact  that  it  is  absolutely  necessary  in  the  interest  of  such  banks  that 
this  law  be  enacted,  creates  an  emergency  and  an  imperative  public 
necessity,  requiring  that  the  constitutional  rule  which  provides  that 
bills  shall  be  read  on  three  separate  days  be  suspended,  and  the  same 
is  hereby  suspended,  and  this  Act  shall  take  effect  and  be  in  force, 
from  and  after  its  passage,  and  it  is  so  enacted. 

Effective  April  2,  1921. 


AMENDING  ACT  RELATING  TO  THE  AMOUNT  TO  BE  PAID 
BY  ANY  BANK  OR  TRUST  COMPANY  INTO  THE 
DEPOSITORS’  GUARANTY  FUND. 

(Passed  by  the  First  Called  Session  of  the  Thirty-seventh  Legislature.) 

S.  B.  No.  82.]  Chapter  33. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas: 

Section  1.  That  article  448,  Chapter  5,  Title  14,  of  the  Revised 
Civil  Statutes  of  the  State  of  Texas,  1911,  be  amended  so  as  to  here- 
after read  as  follows: 

Article  448.  For  the  purpose  of  creating  a Depositors’  Guaranty 
Fund  any  such  bank  or  trust  company  which  shall  elect  to  secure  its 
deposits  under  the  Depositors’  Guaranty  Fund  provided  for  in  this 
chapter,  if  its  application  is  approved  by  said  Board  as  prescribed 
by  Article  451,  shall  pay  to  said  Banking  Board  on  January  1,  1910, 
one  per  cent  of  its  daily  average  deposits  for  the  preceding  year  ending 
November  1,  1909,  not  including  United  States,  State  or  other  public 
funds,  if  otherwise  secured.  Annually  after  the  first  payment  to  said 
fund,  each  bank  and  trust  company  subject  to  the  provisions  of  the 
guaranty  fund  plan  of  this  chapter,  shall  pay  to  said  Board  one-fourth 
of  one  per  cent  of  its  daily  average  deposits  for  the  year  ending  November 
1st,  of  the  preceding  year,  as  above  defined,  which  amount  shall  be 
added  to  said  guaranty  fund;  provided,  that  when  the  amount  available 
in  said  guaranty  fund  shall  reach  the  sum  of  five  million  dollars,  the 
Commissioner  of  Insurance  and  Banking  shall  notify  all  banks  and 
trust  companies  subject  to  the  provisions  of  this  chapter,  at  least 
thirty  days  before  the  next  annual  payment,  of  that  fact  and  there- 
after the  banks  and  trust  companies  participating  shall  not  pay  any 
further  amount  into  said  fund  until  said  fund  shall  be  depleted.  In 
the  event  of  the  depletion  of  said  fund  from  any  cause  so  that  it  falls 
below  five  million  dollars  or  below  the  amount  of  the  guaranty  fund 
on  January  1st  preceding,  or  in  the  event  of  necessity  to  meet  an  emerg- 
ency at  any  time,  said  Banking  Board  shall  have  authority  to  require 
the  payment  for  the  current  year  of  two  per  cent  of  such  daily  average 
deposits,  or  such  part  thereof  as  may  be  necessary  to  restore  said  fund 
to  the  maximum  above  named,  or  to  its  amount  as  of  January  first 
preceding,  or  to  meet  the  emergency;  but  no  bank  or  trust  company 
coming  under  the  provisions  of  this  chapter  shall  ever  be  required  to 
pay  more  than  two  per  cent  of  its  daily  average  deposits  for  any  one 
year;  provided,  further,  that  the  first  payment  herein  provided  for  by 


—9— 


any  bank  which  shall  hereafter  elect  to  secure  its  deposits  under  the 
Depositors’  Guaranty  Fund  shall  be  made  by  said  bank  to  said  Banking 
Board  without  reference  to  said  maximum  amount  in  said  Depositors’ 
Guaranty  Fund. 

Sec.  2.  The  importance  of  the  above  legislation  and  the  necessity 
existing  therefor  in  the  interest  of  the  State  banks  of  this  State,  creates 
an  emergency  and  an  imperative  public  necessity  demanding  that  the 
rule  requiring  bills  to  be  read  upon  three  several  days  be  suspended, 
and  such  rule  is  so  suspended  and  this  Act  takes  effect  from  and  after 
its  passage,  and  it  is  so  enacted. 

Effective  November  15,  1921. 


APPROPRIATION  FOR  THE  SUPPORT  OF  THE  STATE  GOV- 
ERNMENT FOR  THE  TWO  YEARS  BEGINNING  SEP- 
TEMBER 1,  1921,  AND  ENDING  AUGUST  31,  1923. 

(Passed  by  the  First  Called  Session  of  the  Thirty-seventh  Legislature.) 

S.  B.  No.  61.]  Chapter  53. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas: 

The  following  rules  shall  be  observed  by  all  employees  in  rendering 
their  expense  accounts  to  the  head  of  the  department  wherein  they 
are  employed  before  an  expense  account  shall  be  paid  from  appro- 
priations herein  made  for  “traveling  expenses”  for  employees: 

1.  There  must  be  a concise  statement  of  the  duties  performed 
and  the  points  from  which,  and  to  which,  the  employee  travels,  the 
hour  of  arrival  at  and  departure  from  the  designated  post  of  duty  and 
all  other  towns  visited  and  the  object  of  such  visit  and  the  specific 
expenses  incurred  shall  be  clearly  shown. 

2.  The  name  of  hotel,  restaurant,  boarding  or  rooming  house  at 
which  meals  and  lodging  are  procured  shall  be  given  in  every  case. 

3.  Fees  as  tips  to  waiters  on  dining  cars  or  at  hotels  or  restaurants 
shall  not  be  approved. 

4.  A receipt  for  each  item  of  expense  in  excess  of  $1.00  shall  be 
attached  to  accounts  rendered  to  department. 

5.  The  use  of  railroad  scrip  books  and  other  forms  of  transportation 
provided  at  the  expense  of  the  State  for  the  heads  of  all  State  depart- 
ments and  institutions  and  their  employees,  except  passes  authorized 
by  law,  are  hereby  prohibited  and  hereafter  all  railroad  and  other 
transportation  shall  be  paid  in  cash  and  properly  listed  in  expenses 
accounts  rendered.  The  tax  exemption  certificates  shall  be  used  in 
all  cases  where  the  State  is  exempt  from  the  payment  of  Government 
tax  under  Federal  provision.  The  State  Comptroller  shall  be  governed 
accordingly  in  the  issuance  of  warrants  covering  payment  for  rail- 
road scrip  books  and  other  forms  of  transportation. 

Effective  September  2,  1921. 


UBWHKtTf  OF  M-WOSS  U ^ - v 

Jlil  % 6 1922 


B8-  *-'*8-700 


LAWS  AND  AMENDMENTS 


TO  LAWS  PERTAINING 

«UB my0FmE 

W29 


TO  BANKS 


Passed  by  the 


WTY  O f 


^UNQIS 


Forty-fourth  Legislature  of  the  State  of  Texas 
Regular  Session,  1935 


AUTHORITY  OF  BANKING  CORPORATIONS  TO  MAKE 
LOANS  ON  REAL  ESTATE  EXPANDED. 

(S.  B.  No.  92)  . Chapter  6. 

AN  ACT 

to  amend  Article  392,  Revised  Civil  Statutes  of  1925,  and  declaring  an 

emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Article  392  of  the  Revised  Civil  Statutes  of 
1925  be  and  the  same  is  hereby  amended  so  as  to  hereafter  read 
as  follows : 

“Article  392.  Powers  of  Corporation. — Banking  corporations 
shall  be  authorized  to  conduct  the  business  of  receiving  money 
on  deposit,  allowing  interest  thereon,  and  of  buying  and  selling 
exchange,  gold  and  silver  coins  of  all  kinds;  of  lending  money 
upon  real  estate  and  personal  property  and  upon  collateral  and 
personal  securities  at  a rate  of  interest  not  exceeding  that 
allowed  by  law ; and  of  buying,  selling  and  discounting  negotiable 
and  non-negotiable  commercial  paper  of  all  kinds.  No  such 
bank  shall  lend  more  than  fifty  per  cent  of  its  securities  upon 
real  estate,  nor  make  a loan  on  real  estate  to  an  amount  greater 
than  half  the  reasonable  cash  value  thereof;  provided  that  the 
restrictions  as  to  the  amount  a bank  may  invest  in  securities 
upon  real  estate  and  as  to  the  value  of  such  real  estate  as  com- 
pared to  the  security  of  the  loan  shall  not  apply  to  loans  secured 
by  real  estate  in  Texas  which  are  insured  under  the  provisions 
of  Title  II  of  the  National  Housing  Act,  enacted  by  Congress 
of  the  United  States  and  approved  by  the  President,  June  27, 
1934.” 

Sec.  2.  The  fact  that  Congress  of  the  United  States  has 
enacted  a law  entitled  the  “National  Housing  Act”  to  relieve 
unemployment  by  encouraging  the  improvement  in  housing 
standards  and  conditions  and  to  provide  a system  of  mutual 
mortgage  insurance  and  for  other  purposes  in  the  construction 


2 Laws  and  Amendments  Pertaining  to  Banks. 

of  new  Itmmes  and  in  the  refinancing  of  mortgages  on  real  estate 
in  the  United  States,  and  the  further  fact  that  there  are  certain 
restrictions  under  the  laws  of  the  State  of  Texas  which  prohibit 
a full  enjoyment  of  the  provisions  of  the  National  Housing  Act 
#by  Texas,  creates  an  emergency  and  an  imperative  public  neces- 
sity demanding  that  the  constitutional  rule  requiring  bills  to  be 
read  on  three  several  days  in  each  House  be,  and  the  same  is 
hereby  suspended,  and  that  this  Act  take  effect  from  and  after 
its  passage,  and  it  is  so  enacted. 


AUTHORITY  OF  SAVINGS  BANKS  TO  INVEST  FUNDS 
BROADENED  SO  AS  TO  AID  NATIONAL 
HOUSING  ACT. 


(S.  B.  No.  95)  Chapter  9. 

AN  ACT 

to  amend  Article  416,  Revised  Civil  Statutes  of  1925,  as  amended  Acts 

1929,  41st  Legislature,  First  Called  Session,  Page  48,  Chapter  17,  and 

declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Article  416,  Revised  Civil  Statutes  of  1925, 
as  amended  by  the  Acts  1929,  Forty-first  Legislature,  First 
Called  Session,  Page  48,  Chapter  17,  be  and  the  same  is  hereby 
amended  so  as  to  hereafter  read  as  follows: 

“Article  416.  Investment  of  Savings. — Such  corporation  shall 
invest  not  more  than  eighty-five  per  cent  of  the  total  amount 
of  its  savings  deposits  in  any  of  the  following  classes  of  securi- 
ties, and  not  otherwise: 

1.  In  bonds  or  interest  bearing  notes  or  obligations  of  the 
United  States,  or  of  those  for  which  the  faith  of  the  United 
States  is  pledged  for  the  payment  of  principal  and  interest; 

2.  In  bonds,  interest  bearing  notes,  or  other  obligations  issued 
under  due  authority  of  law,  in  payment  for  permanent  improve- 
ments made,  bearing  a fixed  rate  of  interest,  and  payable  within 
a definite  number  of  years,  or  over  a series  of  years,  of  any  city, 
county,  town  or  school  district,  or  other  subdivision  of  this  State, 
now  organized,  or  which  may  hereafter  be  organized,  and  which 
is  now  or  may  hereafter  be  authorized  to  issue  bonds  under  the 
Constitution  and  laws  of  this  State,  which  has  not  defaulted  in 
the  payment  of  any  part  of  either  principal  or  interest  thereof 
within  five  years  previous  to  making  such  investments ; 

3.  In  bonds  of  this  State,  or  of  any  State  in  the  Union,  that 
has  not,  within  the  last  five  years  previous  to  making  such  invest- 
ment, defaulted  in  the  payment  of  any  part  of  either  principal 
or  interest  thereof ; 

4.  In  First  Mortgage  bonds  of  any  steam  or  electric  railroad, 
or  other  public  utility  corporation,  domiciled  in  this  or  any  other 
State  of  the  Union,  the  annual  net  earnings  of  which  steam  or 
electric  railroad,  or  public  utility  corporation,  equaled  during 


Laws  and  Amendments  Pertaining  to  Banks. 


3 


the  last  five  years  twice  the  annual  interest  charges  on  the  entire 
funded  indebtedness  of  such  steam  or  electric  railroad  or  public 
utility  corporation.  Provided  that  not  more  than  twenty-five 
per  cent  of  said  savings  deposits  may  be  invested  in  the  securi- 
ties mentioned  in  this  subdivision; 

5.  In  bonds  or  notes  secured  by  first  mortgage,  first  deed  of 
trust  or  other  first  lien,  on  improved  real  estate  in  Texas,  pro- 
vided the  aggregate  of  such  bonds  or  notes  outstanding  and 
secured  by  coordinate  lien  against  said  property  shall  not  exceed 
fifty  per  cent  of  the  value  of  said  real  estate  and  the  improve- 
ments thereon,  exclusive  of  mineral  leases  or  other  mineral 
estate,  such  bonds  or  notes  to  run  for  a term  of  not  longer  than 
ten  years,  and  to  be  always  accompanied  by  a complete  abstract 
of  title  to  the  property  mortgaged,  and  an  attorney’s  certificate 
approving  the  title  or  a title  insurance  policy  in  some  company 
incorporated  under  the  laws  of  Texas  guaranteeing  the  title  and 
guaranteeing  that  said  bonds  or  notes  retain  a first  lien  on  the 
land  mortgaged ; and  in  addition  thereto  in  assignable  certificates 
issued  by  any  city,  town  or  village  for  street  paving,  the  pay- 
ments of  which  are  secured  by  first  liens,  fixed  or  executed  on 
the  abutting  properties  in  accordance  with  law,  and  made  the 
personal  obligations  of  the  abutting  property  owners;  provided 
that  the  restrictions  contained  in  this  section  shall  not  apply 
to  loans  secured  by  real  estate  in  Texas  which  are  insured  under 
the  provisions  of  Title  II  of  the  National  Housing  Act  enacted 
by  Congress  of  the  United  States,  and  approved  by  the  President 
on  June  27,  1934. 

6.  In  bankers  acceptances  as  defined  by  the  Federal  Reserve 
Act  or  in  collateral  loans,  which  loans  are  collateraled  and 
secured  by  marketable  stocks  or  bonds,  the  market  value  of 
which  shall  be  at  all  times  equal  to  one  hundred  twenty-five  per 
cent  of  the  amount  of  the  loan,  such  collateral  loans  always 
having  a maturity  of  not  longer  than  six  months  from  the  date 
of  purchase  thereof.  Provided  that  not  more  than  twenty-five 
per  cent  of  such  savings  deposits  may  be  invested  in  the  class 
of  securities  mentioned  in  this  subdivision; 

It  shall  be  the  duty  of  the  Directors  of  such  corporation  as 
soon  as  practicable,  to  invest  the  moneys  and  funds  of  such 
savings  accounts,  by  purchase  or  otherwise,  in  the  securities 
hereinabove  described.  Such  directors,  from  time  to  time,  shall 
sell  and  invest  the  proceeds  of  such  investments,  and  for  the 
purpose  of  meeting  current  demands  and  expenses  in  excess 
of  the  receipts,  any  of  the  securities  may  be  sold  or  pledged.” 

Sec.  2.  The  fact  that  Congress  of  the  United  States  has 
enacted  a law  entitled  the  “National  Housing  Act”  to  relieve 
unemployment  by  encouraging  the  improvement  in  housing 
standards  and  conditions  and  to  provide  a system  of  mutual 
mortgage  insurance  and  for  other  purposes  in  the  construction 
of  new  homes  and  in  the  refinancing  of  mortgages  on  real  estate 
in  the  United  States,  and  the  further  fact  that  there  are  certain 


4 


Laws  and  Amendments  Pertaining  to  Banks. 


restrictions  under  the  laws  of  the  State  of  Texas  which  prohibit 
a full  enjoyment  of  the  provisions  of  the  National  Housing  Act 
by  Texas,  creates  an  emergency  and  an  imperative  public  neces- 
sity demanding  that  the  constitutional  rule  requiring  bills  to  be 
read  on  three  several  days  in  each  House  be,  and  the  same  is 
hereby  suspended,  and  that  this  Act  take  effect  from  and  after 
its  passage,  and  it  is  so  enacted. 


INVESTMENT  OF  FUNDS  IN  DEBENTURES  OR  MORT- 
GAGES ISSUED  UNDER  THE  TERMS  OF  NATIONAL 
HOUSING  ACT  MAY  BE  MADE  BY  FIDUCIARIES, 
GUARDIANS,  TRUSTEES,  BANKS  AND  BUILD- 
ING AND  LOAN  ASSOCIATIONS. 

(S.  B.  No.  99)  Chapter  12. 

AN  ACT 

to  amend  Acts  of  1933,  General  Laws,  43rd  Legislature,  Regular  Session, 
Chapter  160,  page  406;  and  declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Acts  of  1933,  General  Laws,  Forty -third 
Legislature,  Regular  Session,  Chapter  160,  page  406,  be  and  the 
same  is  hereby  amended  so  that  the  same  shall  hereafter  read 
as  follows : 

“That  hereafter,  all  mortgages,  bonds,  debentures,  notes, 
collateral  trust  certificates,  and  other  such  evidences  of  indebt- 
edness, issued  or  that  may  hereafter  be  issued  under  the  terms 
and  provisions  of  the  National  Housing  Act,  approved  by  the 
President  of  the  United  States  on  June  27,  1934,  or  by  any  lawful 
agency  created  thereunder,  all  mortgages,  bonds,  debentures, 
notes,  collateral  trust  certificates,  or  other  such  evidences  of 
indebtedness,  which  have  been  or  which  may  hereafter  be  issued 
by  the  Federal  Home  Loan  Bank  Board,  or  the  Home  Owners' 
Loan  Corporation  or  by  any  Federal  savings  and  loan  association, 
or  by  the  Reconstruction  Finance  Corporation,  or  by  the  Federal 
Farm  Loan  Board,  or  by  any  Federal  Land  Bank,  or  by  any 
National  Mortgage  Association,  or  by  any  entity,  corporation  or 
agency,  which  has  been  or  which  may  be  created  by  or  author- 
ized by  an  act,  which  has  been  enacted  or  which  may  hereafter 
be  enacted  by  the  Congress  of  the  United  States,  or  by  any 
amendment  thereto,  which  has  for  its  purpose  the  relief  of, 
refinancing  of  or  assistance  to  owners  of  mortgaged  or  encum- 
bered homes,  farms,  and  other  real  estate,  and  the  improvement 
or  financing  or  the  making  of  loans  on  any  real  property,  shall 
hereafter  be  lawful  investments  for  all  fiduciary  and  trust  funds 
in  this  State,  and  may  be  accepted  as  security  for  all  public 
deposits  where  deposits  of  bonds  or  mortgages  are  authorized 
by  law  to  be  accepted.  Such  mortgages,  bonds,  debentures,  notes, 
collateral  trust  certificates,  and  other  such  evidences  of  indebt- 
edness, shall  be  lawful  investments  for  all  funds  which  may  be 


Laws  and  Amendments  Pertaining  to  Banks. 


5 


lawfully  invested  by  guardians,  administrators,  trustees,  and 
receivers,  for  building  and  loan  associations,  saving  departments 
of  banks,  incorporated  under  the  laws  of  Texas,  for  banks,  sav- 
ings banks  and  trust  companies,  chartered  under  the  laws  of 
Texas,  and  for  all  insurance  companies  of  every  kind  and  char- 
acter, chartered  or  transacting  business  under  the  laws  of  Texas, 
where  investments  are  required  or  permitted  by  the  laws  of  this 
State;  providing  further  that  where  such  mortgages,  bonds, 
debentures,  notes,  collateral  trust  certificates,  and  other  such 
evidences  of  indebtedness  are  issued  against  and  secured  by 
promissory  notes,  or  other  obligations,  the  payment  of  which  is 
secured,  in  whole  or  in  part,  by  mortgage,  deed  or  trust,  or 
other  valid  first  lien  upon  real  estate  situated  in  Texas,  or  where 
such  mortgages,  bonds,  debentures,  notes,  collateral  trust  cer- 
tificates, or  other  such  evidences  of  indebtedness  are  acquired, 
directly  or  indirectly,  in  exchange  for  or  in  substitution  of  notes, 
or  other  obligations,  secured  by  mortgage,  deed  of  trust,  or 
other  valid  first  lien  upon  real  estate  situated  in  Texas,  then  such 
mortgages,  bonds,  debentures,  notes,  collateral  trust  certificates, 
or  other  such  evidences  of  indebtedness,  so  issued  and  so  secured, 
or  so  acquired,  shall  be  regarded  for  investment  purposes  by 
insurance  companies  as  “Texas  Securities/'  within  the  meaning 
of  the  laws  of  Texas  governing  such  investments. 

“The  provisions  of  this  Act  shall  be  cumulative  of  all  other 
provisions  of  the  Civil  Statutes  of  the  State  of  Texas,  affecting 
the  investment  of  funds  or  monies  by  fiduciaries,  guardians, 
administrators,  trustees  and  receivers,  building  and  loan  asso- 
ciations, savings  departments  of  banks,  incorporated  and  doing 
business  under  the  laws  of  Texas,  commercial  banks,  savings 
banks  and  trust  companies,  chartered  and  doing  business  under 
the  laws  of  Texas,  insurance  companies  of  any  kind  and  char- 
acter chartered  and  transacting  business  under  the  laws  of 
Texas,  and  all  corporate  creatures,  organized  and  doing  business 
under  the  laws  of  Texas. 

“It  is  hereby  declared  to  be  the  legislative  intent  to  enact  a 
separate  provision  of  this  Act  independent  of  all  other  provi- 
sions, and  the  fact  that  any  phrase,  sentence,  or  clause  of  this 
Act  shall  be  declared  unconstitutional,  shall  in  no  event  affect 
the  validity  of  any  of  the  provisions  hereof.” 

Sec.  2.  The  fact  that  the  Congress  of  the  United  States  has 
enacted  a law  entitled  the  “National  Housing  Act”  to  relieve 
unemployment  by  encouraging  home  renovation  and  moderniza- 
tion, and  construction  of  new  homes  and  to  relieve  distressed 
home  owners  threatened  with  foreclosure  by  providing  facilities 
for  refinancing  of  mortgages  under  liberal  terms,  and  the  fact 
that  the  investment  laws  and  the  provisions  of  the  Texas  Security 
Act  do  not  provide  for  the  investment  of  funds  in  debentures 
or  mortgages  issued  under  the  terms  of  the  National  Housing 
Act,  creates  an  emergency  and  an  imperative  public  necessity 
demanding  that  the  constitutional  rule  requiring  bills  to  be  read 


6 


. Laws  and  Amendments  Pertaining  to  Banks. 


on  three  several  days  in  each  House  be  and  the  same  is  hereby 
suspended,  and  that  this  Act  take  effect  from  and  after  its 
passage,  and  it  is  so  enacted. 


CERTAIN  FEDERAL  SECURITIES  MADE  LAWFUL  INVEST- 
MENTS FOR  CERTAIN  CORPORATIONS  AND 
FIDUCIARY  FUNDS. 

(H.  B.  No.  135)  Chapter  31. 


AN  ACT 

re-enacting  Section  1,  of  Senate  Bill  No.  561  passed  at  the  Regular 
Session  of  the  43rd  Legislature  of  the  State  of  Texas,  known  as 
Chapter  160,  pages  406  to  407,  which  provides  all  evidences  of 
indebtedness  issued  or  to  be  issued  by  any  agency  now  created  or  to 
hereafter  be  created  by  an  act  or  acts  of  Congress  of  the  United  States 
in  connection  with  legislation  for  the  relief  of  owners  of  mortgaged 
or  encumbered  real  estate,  shall  be  lawful  investments  for  all  fiduciary 
and  trust  funds,  and  may  be  accepted  as  security  for  all  public  de- 
posits where  deposits  of  bonds  or  mortgages  are  authorized  by  law 
to  be  accepted;  declaring  such  evidences  of  indebtedness  to  be  lawful 
investments  for  all  funds  which  may  be  lawfully  invested  by  guardians, 
administrators,  trustees  and  receivers,  for  building  and  loan  associa- 
tions, savings  departments  of  State  banks,  for  banks,  savings  banks 
and  trust  companies  chartered  under  the  laws  of  Texas;  for  all  in- 
surance companies  chartered  or  transacting  business  under  the  laws 
of  Texas,  where  investments  are  required  or  permitted,  and  providing 
that  where  such  evidences  of  indebtedness  are  secured,  in  whole  or 
in  part,  by  mortgage,  deed  of  trust  or  other  valid  lien  upon  real  estate 
situated  in  this  State,  or  where  the  same  may  have  been  acquired 
directly  or  indirectly,  in  exchange  for,  or  substitution  of  notes,  mort- 
gages, deeds  of  trust,  or  other  valid  liens  upon  real  estate  in  this 
State,  then  such  evidences'  of  indebtedness  shall  be  regarded,  for 
investment  purposes  by  insurance  companies,  as  Texas  securities;  and 
amending  said  Section  1,  of  Senate  Bill  No.  561,  Chapter  160  of  the 
laws  passed  at  the  Regular  Session  of  the  Forty-third  Legislature,  by 
adding  thereto  a new  Section  to  be  known  as  Section  1-a,  authorizing 
Building  and  Loan  Associations  that  may  now  or  hereafter  own  bonds 
or  securities  mentioned  in  said  Act  to  exchange  same  with  their  share- 
holders for  their  stock  in  the  association  upon  terms  and  conditions 
agreed  upon,  with  each  shareholder  and  the  directors  of  the  association 
and  under  the  supervision  of  the  Banking  Commissioner  after  notice 
has  been  given  to  all  shareholders;  providing  that  after  notice  has 
been  given  such  bonds  shall  be  ratably  apportioned  to  each  shareholder 
as  his  interest  appears  on  the  books  of  such  association;  allowing 
shareholders  thirty  (30)  days  in  which  to  notify  the  Association  of 
his  desire  to  make  such  exchange;  providing  no  exchange  shall  be 
made  until  the  terms,  and  price  of  stocks  and  bonds  shall  have  been 
published  and  notice  setting  out  the  terms  of  exchange  shall  have  been 
mailed  to  each  stockholder,  and  declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Section  1 of  S.  B.  No.  561,  passed  at  the 
Regular  Session  of  the  Forty-third  Legislature  of  the  State  of 
Texas,  known  as  Chapter  160,  pages  406  to  407,  of  the  General 
Laws  of  the  Forty-third  Legislature  be  and  the  same  is  hereby 
amended  by  adding  thereto  Section  1-a,  said  amended  Section  1 
with  Section  1-a  added,  to  hereafter  read  as  follows: 


Laws  and  Amendments  Pertaining  to  Banks. 


7 


“Section  1.  That,  hereafter,  all  bonds,  debentures,  notes, 
collateral  trust  certificates,  and  other  such  evidences  of  indebt- 
edness, which  have  been,  or  which  may  be  issued  by  Federal 
Home  Loan  Bank  Board,  or  Home  Owners'  Loan  Corporation, 
or  by  any  Federal  Savings  and  Loan  Association,  or  by  the 
Reconstruction  Finance  Corporation,  or  by  the  Federal  Farm 
Loan  Board,  or  by  any  Federal  Land  Bank,  or  by  any  entity,  cor- 
poration or  agency  which  has  been  or  which  may  be  created  by 
or  authorized  by  any  Act  which  has  been  enacted,  or  which  may 
hereafter  be  enacted,  by  the  Congress  of  the  United  States,  or 
by  any  amendment  thereto,  which  has  for  its  purpose  the  relief 
of,  refinancing  of,  or  assistance  to  owners  of  mortgaged,  or  en- 
cumbered homes,  farms  and  other  real  estate,  shall  hereafter 
be  lawful  investments  for  all  fiduciary  and  trust  funds  in  this 
State,  and  may  be  accepted  as  security  for  all  public  deposits, 
where  deposits  of  bonds  or  mortgages  are  authorized  by  law  to 
be  accepted.  Such  bonds,  debentures,  collateral  trust  certifi- 
cates, notes  and  other  such  evidences  of  indebtedness  shall  be 
lawful  investments  for  all  funds  which  may  be  lawfully  invested 
by  guardians,  administrators,  trustees  and  receivers,  for  building 
and  loan  associations,  savings  departments  of  banks  incorporated 
under  the  laws  of  Texas  for  banks,  savings  banks  and  trust  com- 
panies chartered  under  the  laws  of  Texas,  and  for  all  insurance 
companies,  of  every  kind  and  character,  chartered  or  transacting 
business  under  the  laws  of  Texas,  where  investments  are  required 
or  permitted  by  the  laws  of  this  State;  provided,  further,  that 
where  such  bonds,  debentures,  notes,  collateral  trust  certifirates 
and  other  such  evidences  of  indebtedness  are  issued  against  and 
secured  by  promisory  notes,  or  other  obligations,  the  payment  of 
which  is  secured,  in  whole  or  in  part,  by  mortgage,  deed  of 
trust,  or  other  valid  lien  upon  real  estate  situated  in  this  State, 
or  where  such  bonds,  debentures,  collateral  trust  certificates, 
notes,  or  other  such  evidences  of  indebtedness,  are  acquired,  di- 
rectly or  indirectly,  in  exchange  for,  or  in  substitution  of  notes 
or  other  obligations  secured  by  mortgage,  deed  of  trust,  or  other 
valid  lien  upon  real  estate  situated  in  this  State,  then  such  bonds, 
debentures,  collateral  trust  certificates,  notes,  or  other  such  evi- 
dence of  indebtedness,  so  issued  and  so  secured,  or  so  acquired, 
shall  be  regarded  for  investment  purposes  by  insurance  com- 
panies as  “Texas  securities"  within  the  meaning  of  the  laws  of 
this  State  governing  such  investments. 

“Sec.  1-a:  That  hereafter  any  building  and  loan  association 
holding  bonds  of  the  Home  Owners'  Loan  Corporation  may  from 
time  to  time  exchange  same  with  its  shareholders  for  their  stock 
in  the  association  on  such  terms  and  conditions  as  may  be  agreed 
upon  between  the  Board  of  Directors  of  such  association  and 
each  shareholder,  and  under  the  supervision  of  and  with  the 
approval  of  the  Banking  Commissioner,  after  mailing  to  each 
shareholder  notice  and  permitting  all  to  have  the  same  fair 
opportunity  of  exchange.  Providing  that  when  notice  is  sent 


8 


Laws  and  Amendments  Pertaining  to  Banks. 


to  stockholders  under  the  terms  hereof  that  no  exchange  can  . 
be  made  until  all  stockholders  who  want  to  make  such  exchange 
have  been  notified ; providing  further  that  when  all  stockholders 
who  want  to  make  such  exchange  have  given  notice  to  the  build- 
ing and  loan  association  of  their  desire  to  make  such  exchange 
as  each  stockholder’s  interest  may  appear  on  the  corporate  books 
of  said  building  and  loan  association.  Thirty  (30)  days  shall  be 
deemed  sufficient  time  for  a stockholder  to  express  his  wishes 
on  this  matter.  Provided,  no  such  exchange  of  stock  for  bonds 
shall  ever  be  made  unless,  except,  and  until,  the  terms  of  ex- 
change, including  the  price  of  stocks  and  bonds  shall  have  been 
published,  and  notice  setting  out  the  terms  of  exchange,  shall 
have  been  mailed  to  each  stockholder.” 

Sec.  2.  The  fact  that  building  and  loan  associations,  under 
the  Act  amended  hereby,  have  acquired  bonds  of  the  Home 
Owners’  Loan  Corporation  to  the  extent  of  millions  of  dollars 
and  that  the  dumping  of  such  bonds  on  the  open  market  would 
tend  to  materially  lower  their  market  value,  and  the  further  fact 
that  these  associations  could  exchange  such  bonds  to  their  share- 
holders for  stock  and  thereby  benefit  the  shareholders  and  pre- 
vent the  placing  on  the  market  at  any  time  large  amounts  of 
such  bonds,  create  an  emergency  and  an  imperative  public  neces- 
sity demanding  that  the  Constitutional  Rule  which  requires  all 
bills  to  be  read  on  three  several  days  in  each  House,  be  sus- 
pended, and  the  same  is  hereby  suspended,  and  this  Act  shall  be 
in  force  and  take  effect  from  and  after  its  passage,  and  it  is 
so  enacted. 


AUTHORIZING  BANKING  INSTITUTIONS  TO  ISSUE  AND 
SELL  CAPITAL  NOTES  OR  DEBENTURES 

(S.  B.  No.  485)  Chapter  173. 


AN  ACT 

authorizing  banking  institutions  to  issue  and  sell  capital  notes  or  de- 
bentures; subordinating  same  to  other  claims;  defining  the  term 
“capital”  as  used  in  the  Banking  Laws  relating  to  solvency  of  state 
hanks  to  embrace  the  amount  of  capital  notes  and  debentures  out- 
standing; providing  that  the  capital  stock  of  a banking  institution 
shall  be  deemed  unimpaired  when  the  amount  of  said  capital  notes 
or  debentures  as  represented  by  cash  or  sound  assets  exceeds  any 
impairment  as  found  by  the  State  Banking  Commissioner;  requiring 
any  existing  deficiency  in  capital  to  be  paid  in  cash  before  retiring 
said  capital  notes  or  debentures  and  providing  for  assessment  to  meet 
deficiencies  in  the  redemption  fund  for  capital  notes  and  debentures; 
exempting  them  from  any  obligations  of  such  institutions  and  from 
any  assessments  to  restore  impairment  of  their  capital;  and  declaring 
an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  With  the  approval  of  the  Banking  Commissioner 
any  banking  institution  may,  at  any  time,  through  action  of  its 
Board  of  Directors  and  without  requiring  any  action  of  its  stock- 
holders, issue  and  sell  its  capital  notes  or  debentures.  Such 


Laws  and  Amendments  Pertaining  to  Banks. 


9 


capital  notes  or  debentures  shall  be  subordinate  and  subject  to 
the  claims  of  depositors  and  may  be  subordinated  and  subjected 
to  the  claims  of  other  creditors. 

The  term  “capital”  as  used  in  the  laws  of  this  state  relating 
to  solvency  of  state  banking  institutions  shall  be  construed  to 
embrace  the  amount  of  outstanding  capital  notes  and  debentures 
legally  issued  by  any  banking  institution  and  sold  by  it  to  the 
Reconstruction  Finance  Corporation  or  any  other  corporation  or 
individual.  The  capital  stock  of  any  such  banking  institution 
may  be  deemed  to  be  unimpaired  when  the  amount  of  such  cap- 
ital notes  and  debentures  as  represented  by  cash  or  sound  assets 
exceeds  the  impairment  as  found  by  the  State  Banking  Commis- 
sioner. Before  any  such  capital  notes  or  debentures  are  retired 
or  paid  by  the  bank  any  existing  deficiency  of  its  capital  (dis- 
regarding the  notes  or  debentures  to  be  retired)  must  be  paid 
in  cash,  to  the  end  that  the  sound  capital  assets  shall  at  least 
equal  the  capital  stock  of  the  bank.  Provided,  in  the  event  the 
net  profits  are  not  sufficient  to  meet  the  interest  and  retirement 
fund  on  the  debentures,  the  Banking  Commissioner  shall  have 
authority  to  require  the  bank’s  stockholders  to  pay  into  the 
bank  in  cash  an  amount  sufficient  to  meet  the  deficiencies. 

Such  capital  notes  or  debentures  shall  in  no  case  be  subject 
to  any  assessment.  The  holders  of  such  capital  notes  or  de- 
bentures shall  not  be  held  individually  responsible  as  such 
holders  for  any  debts,  contracts,  or  engagements  of  such  insti- 
tution, and  shall  not  be  held  liable  for  assessments  to  restore 
impairments  in  the  capital  of  such  institution. 

Sec.  2.  All  laws  or  parts  of  laws  in  conflict  herewith  are 
hereby  repealed. 

Sec.  3.  The  fact  that  it  is  desirable  to  make  immediately 
available  to  banking  institutions  in  this  state  the  benefits  offered 
by  the  Federal  Government  and  its  agencies  to  such  banks  and 
their  depositors,  creates  an  emergency  and  an  imperative  public 
necessity  that  the  Constitutional  Rule  requiring  bills  to  be  read 
on  three  several  days  in  each  House  be  suspended,  and  the  same 
is  hereby  suspended,  and  that  this  Act  take  effect  and  be  in 
force  from  and  after  its  passage,  and  it  is  so  enacted. 


EXEMPTING  BANKING  INSTITUTIONS  FROM  FURNISH- 
ING SECURITY  FOR  ANY  DEPOSITS  TO  CERTAIN 

EXTENT. 


(H.  B.  No.  928)  Chapter  180. 

an  act 

to  exempt  banking  institutions'  from  furnishing  security  for  any  deposits 
to  the  extent  such  deposits  are  insured  under  Section  12B  of  the 
Federal  Reserve  Act,  as  amended;  repealing  all  laws  in  conflict  here- 
with, and  declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  Notwithstanding  any  provision  of  law  of  this 


10 


Laws  and  Amendments  Pertaining  to  Banks. 


state  or  of  any  political  subdivision  thereof  requiring  security 
for  deposits  in  the  form  of  collateral,  surety  bond  or  in  any  other 
form,  security  for  such  deposits  shall  not  be  required  to  the 
extent  said  deposits  are  insured  under  the  provision  of  Section 
12B  of  the  Federal  Reserve  Act,  as  amended,  or  any  amend- 
ments thereto. 

Sec.  2.  All  laws  or  parts  of  laws  in  conflict  herewith  are 
hereby  repealed. 

Sec.  3.  The  fact  that  it  is  desirable  to  make  immediately 
available  to  banking  institutions  in  this  state  the  benefits  offered 
by  the  Federal  Government  and  its  agencies  to  such  banks  and 
their  depositors,  creates  an  emergency  and  an  imperative  public 
necessity  that  the  constitutional  rule  requiring  bills  to  be  read 
on  three  several  days  in  each  House  be  suspended,  and  the  same 
is  hereby  suspended  and  that  this  Act  take  effect  and  be  in 
force  from  and  after  its  passage,  and  it  is  so  enacted. 


AUTHORIZING  CERTAIN  BANKING  INSTITUTIONS  TO 
TAKE  ADVANTAGE  OF  LOANS,  CONTRACTS,  GRANTS, 
MADE  AVAILABLE  BY  FEDERAL  BANKING  ACT 
CREATING  FEDERAL  DEPOSIT  INSURANCE. 

(S.  B.  No.  486)  Chapter  183. 


to  authorize  any  bank,  trust  company,  bank  and  trust  company,  banking 
association,  stock  savings  bank  or  mutual  saving  bank  now  or  here- 
after organized  under  the  laws  of  this  State,  or  the  conservator,  re- 
ceiver or  liquidator  thereof,  with  the  consent  and  approval  of  the 
Banking  Commissioner,  to  enter  into  such  contracts,  incur  such  obli- 
gations and  generally  to  do  such  acts  as  may  be  appropriate  or 
necessary  to  take  advantage  of  any  and  all  memberships,  loans  sub- 
scriptions, contracts,  grants,  rights  or  privileges  which  may,  at  any 
time,  be  available  or  inure  to  said  banking  institutions  or  their  de- 
positors or  stockholders,  or  their  conservators,  liquidators,  or  receivers, 
by  virtue  of  any  Act  or  Resolution  of  the  Congress  of  the  United 
States  to  aid,  regulate  or  safeguard  banking  institutions  and  deposi- 
tors, including  the  ^ct  creating  the  Federal  Deposit  Insurance  Cor- 
poration; to  empower  any  such  banking  institution  to  subscribe  to  and 
acquire  any  stock  or  debentures  or  bonds  or  othen  types  of  securities 
of  said  corporation  gkid  to  comply  with  its'  regulations  and  require- 
ments; to  authorize  the  appointment  of  the  Federal  Deposit  Insurance 
Corporation  as  receiver  or  liquidator  of  any  such  insured  closed  bank- 
ing institution,  and  to  authorize  said  corporation  to  do  any  and  all 
things  appropriate  in  ^he  sale  or  acquirement  of  the  assets  of  such 
institutions  and  in  the  liquidation  of  same;  to  authorize  receivers  and 
liquidators  and  the  Stale  Banking  Commissioner  to  borrow  money  for 
the  benefit  of  closed  b^nks  and  to  pledge  its  assets  to  secure  same; 
to  provide  for  the  subrogation  of  said  corporation  to  the  rights  against 
said  closed  institutions  of  all  insured  depositors,  whose  deposits  have 
been  paid,  or  for  the  payment  of  which  funds  have  been  made  avail- 
able; to  recognize  right  of  said  corporation  to  make  examinations  of 
and  to  require  reports  from  such  institution;  to  provide  for  disclosure 
by  said  Banking  Commissioner  to  said  corporation  of  the  condition  and 


Laws  and  Amendments  Pertaining  to  Banks. 


11 


affairs  of  such  insured  institution  and  access  to  information  regarding 
same;  to  provide  for  the  vesting  of  title  in  said  corporation  of  assets 
of  such  closed  institution  and  the  right  for  the  corporation,  as  receiver 
or  liquidator;  to  provide  for  the  enforcement  of  the  individual  lia- 
bility of  stockholders  and  directors  thereof;  repealing  all  laws  or  parts 
of  laws  in  conflict  herewith;  and  declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  The  term  “banking  institution/’  as  used  in  this 
Act  shall  be  construed  to  mean  any  bank,  trust  company,  bank 
and  trust  company,  stock  savings  bank  or  mutual  savings  bank, 
which  is  now  or  may  hereafter  be  organized  under  the  laws  of 
this  State. 

Sec.  2.  Any  banking  institution  now  or  hereafter  organized 
under  the  laws  of  this  State  is  hereby  empowered,  on  the  au- 
thority of  its  board  of  directors,  or  a majority  thereof,  by  and 
with  the  consent  and  approval  of  the  State  Banking  Commis- 
sioner, to  enter  into  such  contracts,  incur  such  obligations  and 
generally  to  do  and  perform  any  and  all  such  acts  and  things 
whatsoever  as  may  be  necessary  or  appropriate  in  order  to  take 
advantage  of  any  and  all  memberships,  loans,  subscriptions,  con- 
tracts, grants,  rights,  or  privileges,  which  may  at  any  time  be 
available  or  inure  to  banking  institutions  or  to  their  depositors, 
creditors,  stockholders,  conservators,  receivers  or  liquidators,  by 
virtue  of  those  provisions  of  Section  8 of  the  Federal  “Banking 
Act  of  1933”  (Sec.  12B  of  the  Federal  Reserve  Act,  as  amended,) 
which  establish  the  Federal  Deposit  Insurance  Corporation  and 
provided  for  the  insurance  of  deposits,  or  of  any  other  provisions 
of  that  or  any  other  Act  or  resolution  of  Congress  to  aid,  reg- 
ulate or  safeguard  banking  institutions  and  their  depositors, 
including  any  amendments  of  the  same  or  any  substitutions 
therefor;  also,  to  subscribe  for  and  acquire  any  stock,  deben- 
tures, bonds  or  other  types  of  securities  of  the  Federal  Deposit 
Insurance  Corporation  and  to  comply  with  the  lawful  regulations 
and  requirements  from  time  to  time  issued  or  made  by  such 
corporation. 

Sec.  3.  The  Federal  Deposit  Insurance  Corporation  created 
by  Section  8 of  the  Federal  “Banking  Act  of  1933”  (Section  12B 
of  the  Federal  Reserve  Act,  as  amended)  is  hereby  authorized 
and  empowered  to  be  and  act  without  bond  as  receiver  or  liqui- 
dator of  any  banking  institution,  the  deposits  in  which  are  to 
any  extent  insured  by  said  corporation,  and  which  shall  have 
been  closed  on  account  of  inability  to  meet  the  demands  of  its 
depositors. 

The  appropriate  state  authority,  having  the  right  to  appoint 
a receiver  or  liquidator  of  a banking  institution,  may  in  the 
event  of  such  closing,  tender  to  said  corporation  the  appoint- 
ment as  receiver  or  liquidator  of  such  banking  institution,  and 
if  the  corporation  accepts  said  appointment,  the  corporation  shall 
have  and  possess  all  powers  and  privileges  provided  by  the  laws 
of  this  state  with  respect  to  a receiver  or  liquidator  respectively 
of  a banking  institution,  its  depositors  and  other  creditors,  and 


12 


Laws  and  Amendments  Pertaining  to  Banks. 


be  subject  to  all  the  duties  of  such  receiver  or  liquidator,  except 
insofar  as  such  powers,  priviliges  or  duties  are  in  conflict  with 
the  provisions  of  subsection  (1)  of  Section  8 of  said  “Banking 
Act  of  1933.,, 

Sec.  4.  Whenever  any  banking  institution  shall  have  been 
closed  as  aforesaid,  and  said  Federal  Deposit  Insurance  Corpo- 
ration shall  pay  or  make  available  for  payment  the  insured  de- 
posit liabilities  of  such  closed  institution,  the  corporation, 
whether  or  not  it  shall  have  become  receiver  or  liquidator  of 
such  closed  banking  institution,  as  herein  provided,  shall  be  sub- 
rogated to  all  rights  against  such  closed  banking  institution  of 
the  owners  of  such  deposits  in  the  same  manner  and  to  the  same 
extent  as  subrogation  of  the  corporation  is  provided  for  in  sub- 
section (1)  of  Section  12B  of  the  said  Federal  Reserve  Act,  as 
amended  (being  Section  8 of  the  said  “Banking  Act  of  1933”) 
in  the  case  of  the  closing  of  a national  bank : Provided,  that  the 
rights  of  depositors  and  other  creditors  of  such  closed  institu- 
tion shall  be  determined  in  accordance  with  the  applicable  pro- 
visions of  the  laws  of  this  State. 

Sec.  5.  The  Banking  Commissioner  may  furnish  to  said  cor- 
poration, or  to  any  official  or  examiner  thereof,  a copy  or  copies 
of  any  or  all  examinations  made  of  any  such  banking  institu- 
tions and  of  any  or  all  reports  made  by  same,  and  shall  give 
access  to  and  disclose  to  said  corporation  or  any  official  or  ex- 
aminer thereof  any  and  all  information  possessed  by  the  office 
of  said  Banking  Commissioner  with  reference  to  the  conditions 
or  affairs  of  any  such  insured  institution. 

Nothing  in  this  Section  shall  be  construed  to  limit  the  duty 
of  any  banking  institution  in  this  State,  deposits  in  which  are 
to  any  extent  insured  under  the  provisions  of  Section  8 of  the 
“Banking  Act  of  1933”  (Section  12B  of  the  Federal  Reserve  Act, 
as  amended)  or  of  any  amendment  of  or  substitution  for  the 
same,  to  comply  with  the  provisions  of  said  Act,  its  amendments 
or  substitutions,  or  the  requirements  of  said  corporation  relative 
to  examinations  and  reports,  nor  to  limit  the  powers  of  the 
Banking  Commissioner  with  reference  to  examinations  and 
reports  under  existing  law. 

Sec.  6.  With  respect  to  any  banking  institution,  which  is 
now  or  may  hereafter  be  closed  on  account  of  inability  to  meet 
the  demands  of  its  depositors  or  by  action  of  the  Banking  Com- 
missioner or  of  a couit  or  by  action  of  its  directors  or  in  the 
event  of  its  insolvency  or  suspension,  the  Banking  Commissioner 
and/or  the  receiver  or  liquidator  of  such  institution  with  the 
permission  of  said  Banking  Commissioner  may  borrow  from 
said  corporation  or  any  other  source  and  furnish  any  part  or 
all  of  the  assets  of  said  institution  as  security  for  a loan  from 
same;  provided,  that  where  said  corporation  is  acting  as  such 
receiver  or  liquidator,  the  order  of  a court  of  record  of  compe- 
tent jurisdiction  shall  be  first  obtained  approving  such  loan. 
Said  Banking  Commissioner  upon  the  order  of  a court  of  record 


Laws  and  Amendments  Pertaining  to  Banks. 


IB 


of  competent  jurisdiction,  and  upon  a like  order  and  with  the 
permission  of  said  Banking  Commissioner,  the  receiver  or  liqui- 
dator of  any  such  institution  may  sell  to  said  corporation  any 
part  or  all  of  the  assets  of  such  institution. 

The  provisions  of  this  Section  shall  not  be  construed  to  limit 
the  power  of  any  banking  institution,  the  Banking  Commis- 
sioner, or  receivers  or  liquidators  to  pledge  or  sell  assets  in  ac-' 
cordance  with  any  existing  law. 

Sec.  7.  Upon  the  acceptance  of  the  appointment  of  receiver 
or  liquidator  aforesaid  by  said  corporation,  the  possession  of  and 
title  to  all  assets,  business  and  property  of  such  banking  insti- 
tution of  every  kind  and  nature  shall  pass  to  and  vest  in  said 
corporation  and  without  the  execution  of  any  instruments  of 
conveyance,  assignment,  transfer  or  endorsement. 

Sec.  8.  Among  its  other  powers,  said  corporation,  in  the  per- 
formance of  its  powers  and  duties  as  such  receiver  or  liquidator, 
shall  have  the  right  and  power  to  enforce  the  individual  lia- 
bility of  the  stockholders,  and  directors  of  any  such  banking 
institution,  after  assessment  therefor  by  the  Banking  Commis- 
sioner, and  after  assignment  to  the  corporation  of  the  right 
thereto. 

Sec.  9.  The  validity  of  any  provision  or  part  of  this  Act  shall 
not  be  dependent  upon  any  other  provision  or  part  thereof.  If 
any  provision  or  part  thereof  should  for  any  reason  be  held  un- 
constitutional or  invalid  such  decision  shall  not  affect  the  validity 
of  any  of  the  remaining  provisions  or  parts  of  this  Act. 

Sec.  10.  All  laws  or  parts  of  laws  in  conflict  herewith  are 
hereby  repealed. 

Sec.  11.  The  fact  that  it  is  desirable  to  make  immediately 
available  to  banking  institutions  in  this  State  the  benefits 
offered  by  the  Federal  Government  and  its  agencies  to  such 
banks  and  their  depositors,  creates  an  emergency  and  an  im- 
perative public  necessity  that  the  Constitutional  Rule  requiring 
bills  to  be  read  on  three  several  days  in  each  House  be  suspended, 
and  the  same  is  hereby  suspended,  and  that  this  Act  take  effect 
and  be  in  force  from  and  after  its  passage,  and  it  is  so  enacted. 


RELATING  TO  INVENTORY  OF  ASSETS  AND  CLAIMS  OF 
INSOLVENT  BANKS. 

(H.  B.  No.  530)  Chapter  265. 


an  act 

to  amend  Article  460,  Title  16,  of  the  Revised  Civil  Statutes  of  the 
State  of  Texas,  Revision  of  1925,  and  declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Article  460,  Title  16,  of  the  Revised  Civil 
Statutes  of  the  State  of  Texas,  Revision  of  1925,  be  and  the 
same  is  hereby  amended  so  as  hereafter  to  read  as  follows: 


14 


Laws  and  Amendments  Pertaining  to  Banks. 


“Article  460.  Inventory  of  Assets  and  Claims.  The  Com- 
missioner shall  make  an  inventory  of  the  assets  of  such  insol- 
vent bank,  and  upon  the  expiration  of  the  time  fixed  for  the 
presentation  of  claims,  shall  make  a list  of  all  claims  presented, 
specifying  such  claims  as  have  been  rejected  by  him.  Such  in- 
ventory and  list  shall  be  made  in  duplicate,  and  one  copy  of 
each  shall  be  filed  with  the  County  Clerk  of  the  County  in  which 
such  bank  was  located ; the  other  copies  to  be  filed  in  the  office 
of  the  Commissioner  and  all  said  copies  shall  be  open  to  inspec- 
tion.” 

Sec.  2.  The  fact  that  part  of  Article  460  of  the  Revised  Civil 
Statutes  relates  to  the  Depositor’s  Guaranty  Fund,  which  fund 
has  been  abolished  by  the  Acts  of  1927,  Page  18,  and  the  neces- 
sity for  making  the  law  clear,  create  an  emergency,  and  an  im- 
perative public  necessity  requiring  that  the  Constitutional  Rule 
requiring  bills  to  be  read  on  three  several  days  be  suspended, 
and  the  same  is  hereby  suspended,  and  that  this  Act  take  effect 
and  be  in  force  from  and  after  its  passage,  and  it  is  so  enacted. 


LAWS  AND  AMENDMENTS  TO  LAWS  PERTAINING 

TO  BANKS 

Passed  by  the 


Forty-fifth  Legislature  of  the  State  of  Texas 
to  and  Including  July  15,  1937 


PROPOSED  AMENDMENT  TO  CONSTITUTION,  ARTICLE  16, 

SECTION  16. 


S.  J.  R.  No.  9. 


A JOINT  RESOLUTION 

proposing  an  amendment  to  Section  16,  Article  XVI,  of  the  Constitution 
of  Texas;  providing  that  the  Legislature  shall  authorize  the  incorpora- 
tion of  banking  bodies  and  provide  for  the  supervision  and  regulation 
of  same;  providing  for  all  of  the  capital  stock  to  be  subscribed  and 
paid  for  before  charter  issued;  restricting  foreign  corporations  from 
doing  banking  business;  restricting  corporate  business  to  one  place. 

Be  it  resolved  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Section  16,  Article  XVI,  of  the  Constitution 
of  Texas,  be  amended  so  as  to  hereafter  read  as  follows : 

“Section  16.  The  Legislature  shall  by  general  laws,  authorize 
the  incorporation  of  corporate  bodies  with  banking  and  dis- 
counting privileges,  and  shall  provide  for  a system  of  State 
supervision,  regulation  and  control  of  such  bodies  which  will 
adequately  protect  and  secure  the  depositors  and  creditors 
thereof. 

“No  such  corporate  body  shall  be  chartered  until  all  of  the 
authorized  capital  stock  has  been  subscribed  and  paid  for  in 
full  in  cash.  Such  body  corporate  shall  not  be  authorized  to 
engage  in  business  at  more  than  one  place  which  shall  be  desig- 
nated in  its  charter. 

“No  foreign  corporation,  other  than  the  national  banks  of  the 
United  States  shall  be  permitted  to  exercise  banking  or  discount- 
ing privileges  in  this  State.” 

Sec.  2.  The  foregoing  amendment  to  the  Constitution  shall  be 
submitted  to  a vote  of  the  qualified  electors  of  this  State  at  an 
election  to  be  held  throughout  the  State  on  the  fourth  Monday 
in  August,  1937.  At  this  election  all  voters  favoring  the  pro- 
posed amendment  shall  write,  or  have  printed,  on  their  ballots 
the  following  words: 

“For  the  amendment  of  Section  16  to  Article  XVI  of  the 
Constitution  of  the  State  of  Texas,  providing  for  the  amount 
of  the  liability  of  stockholders  in  State  banks.” 


16  Laws  and  Amendments  Pertaining  to  Banks. 

Those  voters  opposing  said  amendment  shall  write,  or  have 
printed,  on  their  ballots  the  following  words: 

“Against  the  amendment  of  Section  16  of  Article  XVI  of  the 
Constitution  of  the  State  of  Texas,  providing  for  the  amount  of 
the  liability  of  stock-holders  in  State  banks.” 

Sec.  3.  The  Governor  of  the  State  of  Texas  is  hereby  directed 
to  issue  the  necessary  proclamation  for  such  election,  and  to 
have  same  published  as  required  by  the  Constitution  and  the 
amendments  thereto. 

Sec.  4.  The  sum  of  Five  Thousand  Dollars  ($5,000.00),  or  so 
much  thereof  as  may  be  necessary,  is  hereby  appropriated  out 
of  any  funds  of  the  State  of  Texas,  not  otherwise  appropriated, 
to  pay  the  expenses  of  such  election. 


REPORTS  TO  BANKING  COMMISSIONER. 

S.  B.  No.  46. 


AN  ACT 

amending  Article  2484,  Revised  Civil  Statutes  of  1925,  as  amended  by 
Act  of  1929,  41st  Legislature,  Second  Called  Session,  Chapter  85, 
page  168,  Section  1,  requiring  certain  reports  to  be  made  to  the 
Banking  Commissioner,  and  prescribing  the  time  for  filing  such  re- 
ports, the  fees  therefor;  prescribing  penalty  for  failure  to  file;  ex- 
empting such  Associations'  from  all  franchise  or  other  license  tax;  and 
declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Article  2484,  Revised  Civil  Statutes  of  1925, 
as  amended  by  Act  of  1929,  Forty-first  Legislature,  Second  Called 
Session,  Chapter  85,  page  168,  Section  1,  be  and  the  same  is 
hereby  amended  so  as  to  hereafter  read  as  follows: 

“Art.  2484,  Report  to  Commissioner. 

“Within  twenty  (20)  days  after  the  last  business  day  of 
December  of  each  year,  every  such  Association  shall  make  to 
the  Banking  Commissioner  a report  in  such  form  as  he  may 
prescribe,  signed  by  the  President,  Treasurer  and  a majority 
of  the  Supervisory  Committee  who  shall  certify  and  make  oath 
that  said  report  is  correct  according  to  their  best  knowledge  and 
belief.  Said  credit  union  shall  pay  to  the  Banking  Commis- 
sioner at  the  time  of  the  filing  of  this  report  the  sum  of  Five 
($5.00)  Dollars  as  a filing  fee. 

“Any  such  Association  that  shall  neglect  to  make  the  said  re- 
port within  the  time  herein  prescribed  shall  forfeit  to  the  State 
Five  ($5.00)  Dollars  for  each  day  during  which  said  neglect 
shall  continue.  All  such  Associations  shall  be  exempt  from  all 
franchise  or  other  license  tax.” 

Sec.  2.  The  importance  of  relieving  such  Associations  from 
the  burdensome  requirement  of  the  franchise  tax  which  is 
required  of  private  corporations  organized  for  profit,  and  the 


Laws  and  Amendments  Pertaining  to  Banks. 


17 


need  of  conserving,  as  far  as  possible,  the  funds  of  such  Asso- 
ciations for  the  use  and  benefit  of  the  members  thereof,  creates 
an  emergency  and  imperative  public  necessity  that  the  Consti- 
tutional Rule  requiring  bills  to  be  read  on  three  several  days 
be  suspended,  and  this  Act  shall  take  effect  and  be  in  force  from 
and  after  its  passage,  and  it  is  so  enacted. 

Approved  April  8,  1937. 

Effective  April  8,  1937. 


BANK  DEPOSIT  INSURANCE  COMPANY. 

S.  B.  No.  106. 


AN  ACT 

repealing  House  Bill  No.  51,  Chapter  9,  passed  by  the  43rd  Legislature, 
at  its  First  Called  Session,  creating  the  Bank  Deposit  Insurance  Com- 
pany; authorizing  the  liquidation  of  the  affairs  of  the  Bank  Deposit 
Insurance  Company;  providing  a method  and  a jurisdiction  for  such 
liquidation;  providing  for  the  right  of  objection  upon  the  part  of  any 
person  aggrieved  and  authorizing  a hearing  thereon;  providing  for 
appeal  and  writ  of  error;  and  declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  House  Bill  No.  51,  Chapter  9,  creating  the 
Bank  Deposit  Insurance  Company,  passed  by  the  Forty-third 
Legislature  are  (at)  its  First  Called  Session,  effective  ninety 
(90)  days  after  adjournment  be,  and  the  same  is  repealed. 

Sec.  2.  After  the  effective  date  of  this  Act,  the  affairs  of  the 
Bank  Deposit  Insurance  Company  shall  be  liquidated  by  the 
Banking  Commissioner  of  Texas,  its  debts  shall  be  paid  and  its 
remaining  assets  shall  be  distributed  to  those  persons  lawfully 
entitled  thereto,  in  accordance  with  the  terms  and  provisions  of 
said  House  Bill  No.  51,  as  nearly  as  may  be  practicable,  aided 
by  the  principles  and  usages  of  equity  when  necessary.  A com- 
plete statement  of  the  plan  of  such  liquidation  shall  be  filed  by 
the  Banking  Commissioner  with  a District  Court  of  Travis 
County,  accompanied  by  the  recommendation  or  prayer  of  the 
Commissioner. 

Upon  the  approval  of  such  plan  by  the  Court,  if  in  session,  or 
the  Judge  thereof,  if  in  vacation,  such  approval  to  be  entered 
in  the  minutes  of  the  Court,  notice  of  such  order  shall  be  pub- 
lished by  the  Clerk  of  such  Court  in  such  manner  and  for  such 
time  as  the  Court  or  Judge  thereof  may  order,  naming  a time 
when  the  Court  will  hear  objections  thereto.  Any  person  ag- 
grieved by  such  proposed  plan  may  object  thereto  in  writing, 
filed  within  the  time  allowed  by  the  order  of  the  Court  or  Judge, 
and  the  issue  or  issues  made  by  such  person  or  persons  shall  be 
heard  and  determined  by  the  Court  as  an  ordinary  civil  cause, 
and  an  appeal  or  writ  of  error  from  the  judgment  rendered 
thereon  shall  lie  as  in  other  civil  cases. 


18  Laws  and  Amendments  Pertaining  to  Banks. 

Sec.  3.  Any  appeal  in  such  proceeding,  when  perfected,  shall 
operate  as  a stay  of  execution  of  the  judgment  and  no  disburse- 
ment of  the  funds  of  such  company  shall  be  made  by  the 
Commissioner  until  the  cause  shall  have  been  finally  disposed  of. 
Provided  all  necessary  fees,  expenses  and  costs  incurred  by  the 
Commissioner  in  the  proceeding  may  be  paid  by  him  from  such 
funds  at  any  time,  upon  the  order  of  the  Court  or  Judge  thereof. 

Sec.  4.  The  fact  that  the  Bank  Deposit  Insurance  Company  is 
not  functioning  satisfactorily  and  is  not  serving  the  purposes 
for  which  it  was  intended,  due  for  the  most  part  to  the  superior 
facilities  of  the  Federal  Deposit  Insurance  Corporation  Act  of 
the  Congress,  and  the  further  fact  that  a continued  operation 
of  such  company  would  serve  no  useful  purpose  and  would  cause 
an  unnecessary  and  burdensome  expense  to  those  banks  partici- 
pating therein,  create  an  emergency  and  an  imperative  public 
necessity  that  the  Constitutional  Rule  requiring  bills  to  be  read 
on  three  several  days  be  suspended,  and  the  same  is  hereby  sus- 
pended, and  that  this  Act  take  effect  from  and  after  its  passage, 
and  it  is  so  enacted. 

Approved  April  23,  1937. 

Effective  April  23,  1937. 


BANKING  INSTITUTIONS. 


S.  B.  No.  245. 

AN  act 

to  amend  Article  492  of  Chapter  8,  Title  16,  of  the  Revised  Civil  Stat- 
utes of  Texas,  1925,  with  respect  to  State  control  of  hanking  institu- 
tions; providing  that  corporations  organized  under  such  title  are 
declared  to  be  governmental  instrumentalities  of  the  State;  repealing 
all  laws  in  conflict;  declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Article  492,  of  Chapter  8,  Title  16  of  the 
Revised  Civil  Statutes  of  Texas,  1925,  be  amended  to  read  as 
follows : 

“Article  492. 

“All  corporations  created  under  this  title  are  hereby  declared 
to  be  charged  with  the  public  use,  and  shall  be  under  State  con- 
trol and  be  subject  to  such  legislation  as  the  Legislature  may 
enact  for  the  government  and  regulation  of  such  banking  insti- 
tutions in  this  State.  Such  corporation  shall  be  deemed  to  be 
instrumentalities  and  agencies  of  the  State  Government  and  shall 
be  charged  with  the  duty,  when  lawfully  designated  thereto,  to 
act  as  depositories  for  the  public  funds  of  this  State,  and  of 
any  County,  Municipality,  City,  Town  or  Village  or  of  any  polit- 
ical subdivision  within  the  State,  in  accordance  with  the  laws  of 
this  State  governing  depositories  of  public  funds  now  existing 


Laws  and  Amendments  Pertaining  to  Banks. 


19 


or  hereafter  to  exist;  and  such  corporations  shall  be  further 
charged  with  the  duty  to  act  as  fiscal  agent  for  the  State,  or  any 
County,  City,  Town  or  Village,  or  any  subdivision  within  this 
State  upon  request  so  to  do  and  upon  reasonable  compensation 
therefor.  The  rights,  privileges  and  powers  conferred  by  the 
terms  of  this  title  to  corporations  taking  advantage  thereof  or 
incorporating  hereunder  are  to  be  held  subject  to  the  right  of 
the  Legislature,  to  amend,  alter  or  reform  the  same.  Every  cor- 
poration operating  a banking  business  in  Texas  under  a charter 
authorized  by  this  State  prior  to  the  adoption  of  the  Constitution 
of  1876,  shall  be  subject  to  all  the  provisions  of  this  title.” 

Sec.  2.  All  laws  and  parts  of  laws  in  conflict  herewith  are 
hereby  repealed. 

Sec.  3.  The  facts  that  the  present  laws  are  indefinite  and 
uncertain  as  to  whether  or  not  banking  institutions  organized 
under  the  laws  of  this  State  are  agencies  and  instrumentalities 
of  the  State  Government,  and  the  fact  that  national  associations 
have  been  held  to  be  instrumentalities  and  agencies  of  the  United 
States  Government,  and  the  further  fact  that  such  constructions 
and  interpretations  of  statutes  should  operate  without  discrim- 
ination against  corporations  engaged  in  the  banking  business, 
create  an  emergency  and  an  imperative  public  necessity  that 
the  Constitutional  Rule  requiring  bills  to  be  read  on  three  sev- 
eral days  be  suspended,  and  the  same  is  suspended,  and  this  Act 
shall  take  effect  from  and  after  its  passage,  and  it  is  so  enacted. 

Approved  April  26,  1937. 

Effective  April  26,  1937. 


SAVINGS  BANKS— INVESTMENTS. 

H.  B.  No.  493. 


AN  ACT 

to  amend  Article  416,  Revised  Civil  Statutes  of  Texas  of  19  25,  as 
amended  by  Acts,  1935,  44th  Legislature,;  Pa,ge  26,  Chapter  9,  Section 
1,  and  declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Article  416,  Revised  Civil  Statutes  of  Texas 
of  1925,  as  amended  by  Acts,  1935,  Forty-fourth  Legislature, 
Page  26,  Chapter  9,  Section  1,  be  and  the  same  is  hereby  amended 
so  as  to  hereafter  read  as  follows : 

“Article  416.  Investment  of  Savings. 

“Such  corporation  shall  invest  not  more  than  eighty-five  (85) 
per  cent  of  the  total  amount  of  its  savings  deposits  in  any  of 
the  following  classes  of  securities,  and  not  otherwise: 

1.  In  bonds  or  interest  bearing  notes  or  obligations  of  the 
United  States,  or  of  those  for  which  the  faith  of  the  United 
States  is  pledged  for  the  payment  of  principal  and  interest: 


20 


Laws  and  Amendments  Pertaining  to  Banks. 


“2.  In  bonds,  interest  bearing  notes,  or  other  obligations 
issued  under  due  authority  of  law,  in  payment  for  permanent 
improvements  made,  bearing  a fixed  rate  of  interest,  and  payable 
within  a definite  number  of  years,  or  over  a series  of  years,  of 
any  city,  county,  town,  or  school  district,  or  other  subdivision  of 
this  State,  now  organized,  or  which  may  hereafter  be  organized, 
and  which  is  now  or  may  hereafter  be  authorized  to  issue  bonds 
under  the  Constitution  and  laws  of  this  State,  which  has  not 
defaulted  in  the  payment  of  any  part  of  either  principal  or  inter- 
est thereof  within  five  (5)  years  previous  to  making  such 
investments ; 

“3.  In  the  bonds  of  this  State,  or  of  any  State  in  the  Union, 
that  has  not,  within  the  last  five  (5)  years  previous  to  making 
such  investment,  defaulted  in  the  payment  of  any  part  of  either 
principal  or  interest  thereof. 

“4.  In  first  mortgage  bonds  of  any  steam  or  electric  railroad, 
or  other  public  utility  corporation,  domiciled  in  this  or  any  other 
State  of  the  Union,  the  annual  net  earnings  of  which  steam  or 
electric  railroad,  or  public  utility  corporation,  equaled  during 
the  last  five  (5)  years  twice  the  annual  interest  charges  on  the 
entire  funded  indebtedness  of  such  system  or  electric  railroad 
or  public  utility  corporation.  Provided  that  not  more  than 
twenty-five  (25)  per  cent  of  said  savings  deposits  may  be  in- 
vested in  the  securities  mentioned  in  this  subdivision; 

“5.  In  bonds  or  notes  secured  by  first  mortgage,  first  deed 
of  trust,  or  other  first  lien  on  improved  real  estate  in  Texas, 
provided  the  aggregate  of  such  bonds  or  notes  outstanding  and 
secured  by  coordinate  lien  against  said  property  shall  not  ex- 
ceed fifty  (50)  per  cent  of  the  value  of  said  real  estate  and  the 
improvements  thereon,  exclusive  of  mineral  leases  or  other  min- 
eral estate,  such  bonds  or  notes  to  run  for  a term  of  not  longer 
than  ten  (10)  years,  and  to  be  always  accompanied  by  a com- 
plete abstract  of  title  to  the  property  mortgaged,  and  an  attor- 
ney’s certificate  approving  the  title  or  a title  insurance  policy 
in  some  company  incorporated  under  the  laws  of  Texas  guaran- 
teeing the  title  and  guaranteeing  that  said  bonds  or  notes  retain 
a first  lien  on  the  land  mortgaged;  and  in  addition  thereto  in 
assignable  certificates  issued  by  any  city,  town,  or  village  for 
street  paving,  the  payments  of  which  are  secured  by  first  liens, 
fixed  or  executed  on  the  abutting  properties  in  accordance  with 
law,  and  made  the  personal  obligations  of  the  abutting  property 
owners;  provided  that  the  restrictions  contained  in  this  Section 
shall  not  apply  to  loans  insured  by  the  Federal  Housing  Admin- 
istrator ; 

“6.  In  bankers  acceptances  as  defined  by  the  Federal  Reserve 
Act  or  in  collateral  loans,  which  loans  are  collateraled  and  se- 
cured by  marketable  stocks  or  bonds,  the  market  value  of  which 
shall  be  at  all  time  equal  to  one  hundred  and  twenty-five  (125) 
per  cent  of  the  amount  of  the  loan,  such  collateral  loans  always 
having  a maturity  of  not  longer  than  six  months  from  the  date 


Laws  and  Amendments  Pertaining  to  Banks. 


21 


of  the  purchase  thereof.  Provided  that  not  more  than  twenty- 
five  (25)  per  cent  of  such  savings  deposits  may  be  invested  in 
the  class  of  securities  mentioned  in  this  Subdivision; 

“7.  In  notes  or  bonds  secured  by  mortgage  or  trust  deed  in- 
sured by  the  Federal  Housing  Administrator. 

“It  shall  be  the  duty  of  the  Directors  of  such  corporation  as 
soon  as  practicable,  to  invest  the  moneys  and  funds  of  such  sav- 
ings accounts,  by  purchase  or  otherwise,  in  the  securities  here- 
inabove described.  Such  Directors,  from  time  to  time,  shall  sell 
and  invest  the  proceeds  of  such  investments,  and  for  the  pur- 
pose of  meeting  current  demands  and  expenses  in  excess  of  the 
receipts,  any  of  the  securities  may  be  sold  or  pledged/’ 

Sec.  2.  The  fact  that  this  Amendment  is  needed  so  that  the 
loans  insured  by  the  Federal  Housing  Administrator  may  be 
available  to  the  public  affected  thereby  creates  an  emergency 
and  an  imperative  public  necessity  that  the  Rule  requiring  bills 
be  read  on  three  separate  days  in  each  House  and  the  Constitu- 
tional Rule  prohibiting  the  passage  of  a bill  during  the  first  sixty 
(60)  days  of  a Session  be  suspended,  and  said  Rules  are  hereby 
suspended,  and  that  this  Act  become  effective  immediately  from 
and  after  its  passage,  and  it  is  so  enacted. 

Approved  April  26,  1937. 

Effective  April  26,  1937. 


STATE  BANKS— DOUBLE  LIABILITY  OF  STOCKHOLDERS. 

S.  B.  No,  158. 


an  act 

amending  Article  535,  Revised  Civil  Statutes,  Texas,  1925,  providing 
shares  transferable  only  on  corporation’s  books;  imposing  a duty  on 
officers  to  transfer;  repealing  Article  455,  Revised  Civil  Statutes, 
Texas,  1925;  amending  Article  380,  Revised  Civil  Statutes,  Texas, 
1925;  providing  investigation  of  articles  of  association;  providing  a 
determination  of  the  public  necessity  of  business  in  community  where 
sought  to  be  established;  providing  determination  of  capital  being 
commensurate  with  law  and  location;  providing  determination  of  good 
faith  of  applicants;  providing  for  Act  to  be  prospective  in  effect; 
providing  that  stockholders  in  banking  corporations  which  have  ceased 
operation  as  such  be  governed  by  law  existing  at  time  of  closing; 
providing  that  this  Act  shall  become  a law  and  be  effective  only  if,  as 
and  when  Senate  Joint  Resolution  No.  9,  45th  Legislature,  shall  have 
been  adopted  as  an  amendment  to  the  Constitution  of  Texas;  providing 
a savings  clause;  declaring  the  policy,  and  declaring  an  emergency. 

PREAMBLE 

WHEREAS,  By  virtue  of  Senate  Joint  Resolution  No.  9,  of  the 
Forty-fifth  Legislature,  there  is  to  be  submitted  to  the  qualified 
voters  of  Texas  an  amendment  to  the  Constitution  of  Texas  for 
the  purpose  of  determining  whether  or  not  the  double  liability 


22  Laws  and  Amendments  Pertaining  to  Banks. 

imposed  upon  the  personal  liability  of  stockholders  in  State 
banks  to  a sum  equal  to  the  par  value  of  their  stock  shall  be 
eliminated;  and 

WHEREAS,  In  the  event  of  the  adoption  of  said  proposed 
amendment  and  said  double  liability  is  eliminated,  it  is  essential 
that  the  laws  of  the  State  of  Texas  be  in  conformity  therewith ; 
and 

WHEREAS,  The  Legislature  has  heretofore  enacted  certain 
statutes,  to-wit,  Articles  535,  455,  and  380,  Revised  Civil  Stat- 
utes, Texas,  1925,  imposing  double  liability  on  stockholders  in 
banks,  savings  banks,  and  bank  and  trust  companies;  and 

WHEREAS,  In  the  event  of  the  adoption  of  said  proposed 
amendment  the  action  of  the  qualified  electors  of  this  State 
would  in  effect  be  nullified  by  existing  statutes;  and 

WHEREAS,  The  proposed  constitutional  amendment  will  be 
acted  upon  by  the  people  of  Texas  at  a time  when  the  Legisla- 
ture of  the  State  of  Texas  is  not  in  session;  and  in  order  to 
avoid  the  tremendous  expense  incident  to  the  convening  of  a 
Special  Session  of  the  Legislature,  and  to  avoid  the  necessity  of 
the  Governor  re-convening  a Special  Session  of  the  Legislature, 
in  the  event  of  the  adoption  of  said  proposed  amendment,  and 
to  make  sure  that  the  statutes  will  not  conflict  with  the  ex- 
pressed will  of  the  electors  upon  the  adoption  of  said  proposed 
amendment,  it  is  declared  to  be  the  intent  of  the  Legislature 
that  the  hereinafter  bill  be  in  full  force  and  effect  upon  the 
adoption  of  said  proposed  amendment  and  effective  only  in  such 
event. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Article  535,  Revised  Civil  Statutes,  Texas, 
1925,  be  amended  so  as  to  hereinafter  read  as  follows : 

“Shares  of  stock  in  any  bank,  savings  bank  or  bank  and  trust 
company  organized  under  the  laws  of  the  State  of  Texas  shall  be 
transferable  only  on  the  books  of  the  corporation,  and  it  shall 
be  the  duty  of  the  officers  of  the  corporation  to  make  such 
transfer  upon  the  books  at  the  request  of  the  transferer  or 
transferee.” 

Sec.  2.  That  Article  455,  Revised  Civil  Statutes,  Texas,  1925, 
is  hereby  repealed  and  nullified. 

Sec.  3.  That  Article  380,  Revised  Civil  Statutes,  Texas,  1925, 
be  amended  so  as  to  hereinafter  read  as  follows: 

“The  Board  shall  carefully  examine  the  articles  of  association 
and  said  Board  shall  inform  itself  as  to  the  public  necessity  of 
the  business  of  the  community  in  which  it  is  sought  to  estab- 
lish the  same,  and  to  determine  whether  its  capital  is  com- 
mensurate with  the  requirements  of  law,  and  the  location  of  the 
business,  and  that  the  applicants  are  acting  in  good  faith.” 

Sec.  4.  This  Act  of  amendments  of  Articles  535  and  380  and 
of  repeal  of  Article  455  insofar  as  they  affect  the  liability  of 
shareholders  in  corporations  having  banking  or  discount  privi- 
leges, shall  be  entirely  prospective  in  effect  and  shall  not  apply 


Laws  and  Amendments  Pertaining  to  Banks. 


2 


to  any  such  corporate  body  as  may  have  ceased  to  transact  its 
regular  corporate  business  prior  to  the  effective  date  hereof, 
but  as  to  such  corporation  the  rights  of  its  creditors  and  the 
liability  of  its  shareholders  are  saved  from  this  Act,  and  shall 
be  governed  by  the  law  as  it  existed  at  the  time  of  such  closing. 

Sec.  5.  This  Act  shall  take  effect  and  become  a law  if  and 
when  Senate  Joint  Resolution  No.  9 of  the  Forty-fifth  Legisla- 
ture shall  have  been  adopted  as  an  amendment  to  the  Constitu- 
tion of  Texas. 

Sec.  6.  If  any  sentence,  phrase,  paragraph,  or  section  of  this 
Act  shall  be  invalid,  then  such  invalid  portion  shall  not  in  any 
way  affect  the  remainder  of  this  Act,  and  it  is  hereby  declared 
as  the  legislative  intent  that  the  remainder  of  this  Act  would 
have  been  passed  by  the  Legislature,  notwithstanding  the  in- 
validity of  such  sentence,  phrase,  paragraph,  or  section. 

Sec.  7.  The  fact  that  the  Congress  of  the  United  States  has 
seen  fit  to  repeal  the  double  liability  imposed  upon  stockholders 
in  national  banking  associations,  effective  July  1,  1937 ; the  fact 
that  state,  as  well  as  national  banking  institutions,  are  eligible 
for  membership  in  the  Federal  Depositors  Insurance  Corpora- 
tion; the  fact  that  ninety-five  (95%)  per  cent  of  the  depositors 
in  State  banks  are  so  insured ; the  fact  that  the  resources  of  the 
Reconstruction  Finance  Corporation  have  been  made  available 
to  State,  as  well  as  national  banking  institutions;  the  fact  that 
a liability  is  imposed  upon  stockholders  in  ordinary  private  cor- 
porations, in  national  banks  and  in  State  banking  institutions 
in  many  other  states,  tends  to  discourge  investments  in  the 
stock  of  State  banking  institutions,  imposes  an  undue  hardship 
and  burden  upon  the  stockholders  thereof,  and  creates  an  im- 
perative public  necessity  that  the  Constitutional  Rule  requiring 
bills  to  be  read  on  three  several  days,  be  suspended,  and  said 
Rule  is  so  suspended,  and  this  Act  shall  take  effect  and  be  in 
force  from  and  after  the  time  provided  for  in  Section  5 hereof, 
and  it  is  so  enacted. 

Approved  April  29,  1937. 

Effective  as  shown  in  Section  5. 


BANKING  CORPORATIONS— POWERS 

H.  B.  No.  489. 

AN  ACT 

to  amend  Article  392,  Revised  Civil  Statutes  of  Texas,  of  1925,  as 
amended  by  Acts',  1935,  44th  Legislature,  Page  21,  Chapter  6,  Section 
1;  and  declaring  an  emergency. 

Be  it  enacted  by  the  Legislature  of  the  State  of  Texas : 

Section  1.  That  Article  392,  Revised  Civil  Statutes  of  Texas, 
of  1925,  as  amended  by  Acts  1935,  Forty-fourth  Legislature, 


P?4  Laws  and  Amendments  Pertaining  to  Banks. 

Page  21,  Chapter  6,  Section  1,  be  and  the  same  is  hereby 
amended  so  as  to  hereafter  read  as  follows : 

“Article  392.  Powers  of  Corporation. 

“Banking  Corporations  shall  be  authorized  to  conduct  the  busi-' 
ness  of  receiving  money  on  deposit,  allowing  interest  thereon, 
and  of  buying  and  selling  exchange,  gold  and  silver  coins  of  all 
kinds ; of  lending  money  upon  real  estate  and  personal  property 
and  upon  collateral  and  personal  securities  at  a rate  of  interest 
not  exceeding  that  allowed  by  law ; of  buying  and  selling  certifi- 
cates, securities,  and  shares  insured  by  the  Federal  Savings  and 
Loan  Insurance  Corporation ; and  of  buying,  selling  and  discount- 
ing negotiable  and  non-negotiable  commercial  paper  of  all  kinds. 
No  such  bank  shall  lend  more  than  fifty  (50)  per  cent  of  its 
securities  upon  real  estate,  nor  make  a loan  on  real  estate  to  an 
amount  greater  than  half  the  reasonable  cash  value  thereof; 
provided  that  the  restrictions  as  to  the  amount  a bank  may  in- 
vest in  securities  upon  real  estate  and  as  to  the  value  of  such 
real  estate  as  compared  to  the  security  of  the  loan  shall  not 
apply  to  mortgage  loans  which  are  insured  by  the  Federal  Hous- 
ing Administrator.” 

Sec.  2.  The  fact  that  this  amendment  is  needed  so  that  the 
loans  insured  by  the  Federal  Housing  Administrator  may  be 
available  to  the  public  affected  thereby  creates  an  emergency 
and  an  imperative  public  necessity  that  the  Rule  requiring  bills 
to  be  read  on  three  separate  days  in  each  House  and  the  Con- 
stitutional Rule  prohibiting  the  passage  of  a bill  during  the 
first  sixty  (60)  days  of  a session  be  suspended,  and  that  this 
Act  become  effective  immediately  from  and  after  its  passage, 
and  it  is  so  enacted. 

Approved  June  9,  1937. 

Effective  90  days  after  May  22,  1937,  date  of  adjournment- 


RV 


J r»! 


9 1938 

OF  ILLINOIS 


